Facebook advertising is very popular for a reason. Facebook has a wealth of information about its users. The social network knows its members' gender, age, location, likes and interests. This, in turn, translates into Facebook's ability to target ads to users' specific tastes. Knowledge is power, and in this case, knowledge is money.
Why should you advertise on Facebook? Placing ads on Facebook is one of the most targeted advertising opportunities available today. Online advertising has gone through incredible growth in the last few years and social advertising is no exception. You can advertise on Facebook, LinkedIn, Twitter, and YouTube with increased chances of reaching your perfect customer, thanks to targeted demographic information.
Sponsored ads (like the sample below) are placed on the right side of your homepage, events pages and your Timeline. Facebook has a targeting feature that places only advertising relevant to your geographic area or interests.
The cost of advertising on Facebook depends on the size of your audience and your budget. The cost of your ads on Facebook is up to you. Facebook ad pricing works on an auction system (just like Google ads). You place a bid to tell Facebook how much you are willing to pay per click – which is known as cost per click (CPC) bid, or only for the clicks per thousand impressions (CPM) you receive, up to the amount you set for your budget.
But what type of bid should you choose? Well that depends as each one works a little differently, and each one is designed to meet a different marketers objective. There are 4 different bid types.
CPM: Cost per thousand: With this bid you're basically telling Facebook that you care the most about the views of your ad. So that when Facebook delivers the impressions, we deliver as many impressions as they can, because the want to deliver as many views as they can.
CPC: Cost per click: Very industry standard, CPC enables you as the advertiser to tell Facebook that you actually care the most about people clicking on your ad. You bid for clicks, and Facebook delivers the ad to users that Facebook believes are most likely to click on your ad.
oCPM: Optimized cost per thousand: This bid type is designed for advertisers who really care about conversion – the direct response of performance advertising. With oCPM bidding, we give you the options to tell Facebook that you care about actions that users that users take after clicking or viewing your ad.
So let's say you are a retailer and you sell shoes, you can use the Facebook conversion tracking pixel which will tell Facebook whenever someone has purchased a pair of shoes from you after viewing an ad. And using oCPM you can tell Facebook that you care the most about these types of conversions, and Facebook will deliver ads to users that they believe are most likely to convert on your website. While Facebook is delivering the ads to users and optimizing for those conversions, Facebook charges for impressions.
CPA: Cost per action: When CPA is available for the ad product that you're buying to use CPA. Because like oCPM, CPA allows you to tell Facebook the conversion that you care the most about, and Facebook will deliver the ad to users that Facebook believes are most likely to do that conversion. And with CPA you'll be charged every time that conversion happens.
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